Letter from London: Mrs May’s London Speech Pulls Warring Party from the Brink

President of the European Council of Ministers, Donald Tusk, visits prime minister, Theresa May, at No 10 Downing Street.

By Martin Roche

British Prime Minister, Theresa May, gave a speech in London last week that achieved three political advantages. It was not a great work of oratory and, as usual, Mrs May over-played her use of almost meaningless sound bites. Intellectually and economically, the speech was full of holes, contradictions and of a quite a few aspirations that are never likely to be fulfilled. But it changed the national mood. That was her first advantage.

The speech came at the end of a week that had seen the opposition Labour party shift its ground and commit to staying inside the European Union’s customs union. Remaining in the customs union would assure frictionless trade between the UK and the EU. Of far greater political significance, it would avoid the need for manned customs and immigration posts on the border between Northern Ireland and the Irish Republic and thus preserve the “Good Friday Agreement,” which has been the foundation for peace in Northern Ireland for twenty years.

“Terrible public backlash”During the week, a former chief civil servant at the UK’s trade department compared Britain’s current EU advantages with the government’s ambitions for free trade deals around the world after Brexit as, “giving up a three-course meal for the promise of a packet of crisps in the future.”

Former Labour Prime Minister, Tony Blair, called for voters to be given a referendum to approve or reject the final deal Britain reaches with the EU. But the biggest blast of all came from former Conservative Prime Minister, Sir John Major.

Major, now a much-respected elder statesman, counselled Mrs May that Brexit is a great mistake. He warned of a “terrible public backlash” if the UK is left poorer and weaker after leaving the EU. One over-excited Conservative MP called Sir John, “a traitor.’

Few of Mrs May’s supporters and opponents expected much from her speech on Friday. Her three previous speeches on Brexit had fallen flat in the UK and failed to impress EU leaders, whose goodwill she needs to strike a workable deal on trade and countless other vital matters. The speeches lacked substance and detail. The EU was losing patience at the lack of clear direction on what the UK wanted.

Vastly expensiveIn Britain, the public was becoming alarmed with the pro and anti-Brexit fighting inside the government and the Conservative party. After all, they had been told by the Brexit leaders that coming out of the EU would be easy – that Britain would have all the benefits of the EU without the cost and loss of sovereignty. It has been the exact opposite of easy and will be – we now know – vastly expensive.

On Friday in her speech, Mrs May, at least for the time being, stopped the in-fighting. She reminded the Remain side that the not only is the country leaving the EU, but its Single Market and Customs Union. But she said the UK wanted to stay inside three EU agencies concerned with medicines, aviation and chemicals, as associate members. That means paying money and accepting rules and legal jurisdiction. It would not have been welcomed by the hard Brexit wing of her party.

Mrs May spoke forcefully when she said that not everyone in her party would get what they wanted. With that she took a much firmer grip of her party than at any time since she lost the Conservatives their Westminster majority at the ill-judged general election of 2017. The signal was clear. The party had come close to splitting and would if its civil war did not stop. Compromise was needed. Compromise was what she got. She also got the advantage of buying herself time. There is unlikely to be a challenge to her leadership for the rest of this year.

Greatest political strengthNobody should be fooled into thinking all is now sweetness and light inside the Conservative party. But the party has displayed its single greatest political strength. It has stayed united. For the sake of its unity and its future electoral prospects it has, at least, publicly, patched up its differences. Split parties don’t win elections. Mrs May’s third advantage is that she has pulled her party back from the brink of self-annihilation.

Theresa May’s speech was her most successful to date. Despite it, it left a great deal unaddressed and enormous problems still face her. The UK is far from settled and the pro-Remain side has sparked a nation-wide movement of ordinary people. They are not going away. Nor is the Labour party, which appears to be edging closer to a far less radical Brexit.

Mrs May spoke about the Northern Ireland issue, but proffered no solution. Exporting businesses still don’t know what regime they will be faced with after Brexit. The EU has said it will not allow the UK to “cherry pick” which sectors of its economy it wants to favour. She has made it clear that cherry picking is exactly what she aims to do.

Winners and losersThe problem with cherry picking is that you get winners and losers. Indeed, Mrs May acknowledge that when she said in her speech, “Life is going to be different. Our access to each other’s markets will be less than it is now.”

In that phrase is the biggest weakness of Mrs May’s strategy. When the losing sectors discover they are losers and how much they have to lose the political world will shift from under Mrs May’s feet. Her hope must be that the losers don’t notice until it’s too late that their market access and favourable regulatory rules have been negotiated away.

Mrs May’s counterparts in the EU have given her speech a mixed reaction. None were enthused but welcomed what details they were given. Others dismissed her approach as fantasy and simply unobtainable.

The really hardball negotiations between the UK and the EU will soon begin. Britain is scheduled to leave the EU on 29th March 2019. The next 13 months will see all of the British government’s energies focused on Brexit.

Somebody though should be keeping an eye on Britain’s economy. Growth has dramatically slowed in the UK since the Brexit vote. Inflation is up and proving persistent. Wages are static. House prices are falling, as are car sales Household spending is down and major retail chains are finding business very tough. Two major retailers went bust last week and with them went around 5,000 jobs.

Britain’s public services have been cut and cut and one large local authority (a Conservative council) has effectively gone bankrupt. There is little doubt that the recovery in the EU and global economies is keeping the UK economy in positive territory. But the economy is fragile. If it starts to show serious cracks the Conservative party and Brexit may not survive.